Sunday, August 24, 2008

Navy Federal Credit Union Harasses Military Customers

In January 2008, my colleague Jay S. Fleischman wrote an article about a bankruptcy judge in New York that fined Navy Federal Credit Union ("NFCU") over $13,000 for continuing to contact a debtor in violation of the U.S. Bankruptcy Code. I will soon have the opportunity to take legal action on behalf of a client who is currently on active duty in the Navy that has been similarly harassed by NFCU.

Under the California Rosenthal Fair Debt Collection Practices Act, creditors cannot legally contact consumer debtors that are represented by an attorney. Despite several phone calls from my office and written confirmation that we represented the debtor, the contact continued. NFCU is accused of (1) using profanity with my client; (2) threatening to call my client’s commanding officer about the debt; (3) threatening to garnish my client’s wages while he is on active duty and when a judgment did not exist; and (4) telling my client that he was a "disgrace" to the military.

Even after I filed the bankruptcy, NFCU continued to contact my client. So far, NFCU has sent my client 3 letters since we filed his bankruptcy petition. Each letter acknowledges notice of the bankruptcy filing and threatens to continue reporting negative information on my client's credit report, all in violation of the bankruptcy automatic stay. The continued contact with my client is also violates the California Rosenthal Act because my client has legal representation. I will be filing a motion for sanctions against NFCU in the very near future.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

26 comments:

Lady Carol said...

Mr. Starrett. I read your blog and I just wanted to say kudos. I do not have a similar situation except that I am a Navy Federal Customer. I am separated from the Air Force but lost my civilian job 2 years ago. I wrote Navy Federal a hardship letter and they continue to call me even though I told them I went from a 38,000 a year job to a waitress job where I make $8.00 an hour. They told me I was one of millions of customers and and they just wanted their payment regardless of my situation. At any rate I'm glad I'm not the only one who does not agree with their customer service tactics. Thank you for the opportunity to read your blog.

Only as Gabe's Mom said...

Wow I work for NFCU and have also applied for bankruptcy most of my debt it with NFCU they have also send me letters of about my bankruptcy I don’t say anything cause I need to keep my job since they can not firer me base on me applying for bankruptcy

Carl Starrett said...

I am currently working on another blog entry about another client that was victimized by Navy Federal Credit Union. Stay tuned.

Anonymous said...

Carl Starrett represented my husband and me for our Chapter 7 Bankruptcy. Navy Federal Credit Union continued to contact us repeatedly even after we had retained an attorney and provided Navy Federal Credit Union with his contact information. We did this multiple times. I informed them I had been on disability, lost my job etc. Even so, we continued to receive letters from Navy Federal Credit Union which threatened to repossess our only car, to which they held the title for an auto loan which was not/never in default. Navy Federal Credit Union is aware of the laws and chose to continue violating them anyway. If you Google Navy Federal Credit Union and the words fined, violated stay, harassed, you will find several complaints. Out of all the creditors we had to deal with Navy Federal Credit Union was by far the worst, unprofessional and stressful.

Anonymous said...

My daughter worked for three large companies here in the Florida panhandle area, and each one moved or closed or considerably reduced their operations. Being a small town, she had not much choice of where to work and ended up making about half of what she made in the past. She's been working two jobs several years now just trying to make ends meet. She was a member of NFCU and signed up for their debt relief/management program that they told her would get her out of debt in 3 years if she followed the plan. She faithfully followed the plan. The program was awful. She had five different counselors over the past two years. They have lost half of her files/paperwork. To make a long story short, she ended up owing more than when she started out with them. Now, I think due to all the financial stress and overwork, she has cancer; and will have surgery this week. We've had three harassing calls from NFCU because her November credit card payment is past due. She told them ahead of time this was going to happen. I think NFCU practices are a disgrace. And their debt relief/management program needs to be investigated.

Anonymous said...

I too have filed for chapter 7 and I am continually called by NFCU on a daily basis regarding my credit card account. The latest message they left stated that they were now going to garnish my wages and put a lien on my house. This is funny because they are foreclosing on my house as I lost my job of 26 years last July and am drawing unemployment benefits which they stated they wanted a piece of.... I would NEVER do business with the NFCU EVER again, and I have been a customer in good standing for over 30 years. My attorney is dealing with them and I hope he gets them fined.

Bryan said...

I have read all these comments and I am concerned. I am retired Navy and just had to leave my current job to go on disability. I have a credit card, personal loan and 2 car loans with NFCU and I have already fallen behind on all but one of the car loans. NFCU has already started calling me. Today while I was on the phone with NFCU I had 2 other people from NFCU calling and leaving messages on my cell. As it stands I will probably have to file bankruptsy because I wont be getting enough on disability to cover my debt. I get enough from my military retirement and VA disability to pay my mortgage, keep my lights on and have food on my table, but thats it. I will probably need to get an Attorney. It sucks that I served my country for 20 years and now it comes down to being unable to support myself and my family, but I will do the best I can.

Robert Weed said...

Carl, I'm a bankruptcy lawyer in Virginia. Navy Federal seems out of line in dealing with my clients, too.

I have a recent client who fell behind on her second mortgage with them, and Navy Fed took the baby sitting money earned by her young children. Your readers might be interested in what I say about that.

http://robertweed.com/blog/before-bankruptcy/navy-federal-takes-money-from-children/

Anonymous said...

I too am dealing with NFCU in regards to my account and a former joint account with another member (my mom). Apparently someone didn't do their job and take my name off this joint account after I turned in the correct form to do so, a few years ago. Imagine my surprise to find out that I owe money on a debt from that joint account! After going back and forth on this issue with the bank, I paid the amount just to be done with it. I also filled out ANOTHER form to remove my name from said account. Well, my name was removed on the spot (which I found out was NOT the proper procedure!), then I was told that I did NOT owe that money and to go back to the bank to get it back (which I did). Well, I got a call this morning from the manager of the branch that I use telling me that I need to come back in WITH that money to pay it again because I DO owe it. Whenever I asked them to pull up my mom's account that I was a joint holder of, they stated that they CAN'T because my name is NOT on the account anymore. BUT they want me to pay this bill because it WAS on the account. Also, my mom had already paid this bill in 2009 and simultaneously CLOSED the account as well. I was told by one of their collections people that the account was paid and closed and there is no debt what so ever. When I brought this up to the branch manager here, she plainly stated that "Well, if they updated your mom's account, they didn't update your's and the system is telling me that you are responsible for this account. So you need to pay". Hmm...needless to say, it's very frustrating! They want me to pay the bill for an account my name is NOT on anymore , but they won't pull up the account in question because my name is NOT on the account. Does this make sense? And why does one party of this institution tell me that the debt was paid and the bank branch keeps telling me it needs to be paid?!?! Ugh.

Anonymous said...

One thing to mention regarding NFCU and online access to your accounts is that as soon as you file for bankruptcy you will permanently lose access to the accounts information. You will only be able to see the statement.

NYQUIL said...

I am preparing a lawsuit against NFCU. They've essentially terrorized me over the last two years (including while in bankruptcy). Frankly, nobody deserves to be treated like some of us have been treated. While I take responsibility for not completely fulfilling my obligations, I've paid off multiple loans and paid thousands of dollars in interest to NFCU. Nothing justifies treating people this way. Please contact me at 703.539.9211 to compare notes on our experiences. It my also serve as sort of "group therapy" for some of us who have been terrorized by these "banksters" to talk openly about our situation. You can bet that most people that they terrorize just "take it" and move on. Legally, NFCU need to pay for their abuses. My email is nyquil762@gmail. Feel free to contact me anytime. Thanks and good luck.

Rolanda Roro Nelson said...

I was employed by them for two years up until Dec 20 2010. I was fired for failure to protect the credit unions assets. I was robbed at gun point on Dec 11,2010. The robber said look down and I did. I didn't look in my drawers because I didn't want to make any sudden movements. I thought I had given the security device but I didn't. The loss was $3400.00. For that I was terminated. It's not like they wont get it back because it's insured
Now i'm without a job, no way to take care of my kids or pay my bills. I need some legal advice.

Anonymous said...

I actually work for NFCU collections, some practices I do disagree with and hey stuff happens. We do offer personal finance management and do offer exstentions. Yes the auto dialer calls between 1-6 times a day per deliquent account even after you talk to us but that's how the system works, automated dialer keyword. I hear all the different hardships and understand as a human being but understand we have families to feed and bills to pay too, as collectors it may not be the ideal job but we gotta do what we gotta do hate it or love it.

Carl Starrett said...

To the previous poster: if you work for NFCU, then you must have training in unfair debt collections practices. Threatening to call someone's commanding officer or telling someone they are a disgrace to their country for having financial problems is neither fair, ethical nor moral. if you "gotta do what you gotta do", it still has to be in compliance with the law.

Anonymous said...

I also have issues with NFCU. My husband is stationed in Japan in the USMC. About 14 years ago I had an issue with my account which was a joint account with my mother. NFCU said that i had owed them 3200.00 dollars. We fought it and were told 14 years ago that it was a dead issue. We did not hear from NFCU and they had even given me a car loan which was paid in full and allowed me to open another acct. Once again we heard nothing from NFCU saying i owed them any money. When we got here to Okinawa my husband wanted to have a joint account. So we went in and added me and just like before nothing was said to us about owing any money. All of a sudden 2 days later all of our money is gone out of our accounts. They told us we had to contact a company called LCR which is their charge off department. LCR said we owed them the money and that we could pay patments on the balance so they would stop taking all of our money. So we set the payment plan up so we would have money while we were trying to fix the issue. The took the first payment out and once again the next month they cleaned out our account even though we had the payment plan set up. We are now all the way in Japan with our acct in the negative because of this. I need advise.

Lee Legal said...

As a Bankruptcy lawyer in Virginia, I can attest to numerous instances of Navy Federal harassing my clients, but never in violation of the automatic stay. Their attorneys are not exactly the friendliest, either.

Gary Abbott said...

I am a six year Navy Veteran and was in the service during Operation Enduring Freedom. I had a checking account that was charged off in the amount 160 dollars. I called the collections department and paid the debt in full as it is noted on my account "Paid In Full". Now I recently opened another checking account after being ineligible for one for two years and my savings and NEW checking account was debited by NFCU $160. The transactions were marked Adjustment DR. The guy I talked to in collections was very rude and threatening when I made the payment I asked when I would be eligible for another checking account and he said probably never or a while. This is upsetting to me because I am in college right now and feel like I am being robbed by this employee or department because they are doing such a crappy job. No Communication!

Anonymous said...

To the ones who keep getting harrased by phone calls and are in bankruptcy with a attorney. Oh my god change your phone number and only provide it to your attorney since they are not allowed to contact u because of bancruptcy laws and you have a attorney. So you cause the added stress on yourselves. If the law says they cant call you then change number and then they have no choice but to contact your lawyer. Im a nfcu member here is some advice. If the loans are only in 1 persons name and you are on joint acct then you open your own acct leave the person on the loans off your acct and use it as a emegency acct and if you need to keep your money transfer it online to your acct and then because the the person on the loans is not tied to your acct they cant touch the money. My husband is service member im a joint acct holder on his acct but i am not on his loans. So i opened my own acct solely in my name if i get in a rough patch etc i transfer all his money into my acct and it cannot be touched because 1 i am not on loans 2 he is not on my acct. And guess what we still have our money i pay them when im ready not when they think they can this is how we tell them to fuck off ha ha. Not saying we dont pay our loans but there are times a unexpected home repair comes up and you need to be able to use that loan money and if they refuse defferment then thats what we do doing it for years. Their are ways around the nfcu loan crooks just be smarter than them!!!!!

Anonymous said...

Go with USAA, as matter of fact, I encourage everyone to close their NFCU account and bank with USAA. USAA has much better customer service than Navy federal

Anonymous said...

I have to say that over the last 4 months I have been nothing but fed up with Navy Federal. I have been a long time member and I have been treated so poorly that I now plan to close all my accounts and refinance my Condo so I can cut all ties with Navy Federal once and for all. I have all but closed out my savings account, I have paid off my credit card and plan to close my checking this week. I have provided you all with insurance after insurance documents only to be told that everything is now in order then have a letter sent to me a couple weeks later saying that you will add a policy to my escrow account unless I once again provide you the same information. I have now been through this at least 6 times each time I am assured that it is all now in order. Then once again today I get another letter stating that I need to do it again. Words cannot describe how unhappy this makes me I have wasted at least 60 hours of my time on hold with you and insurance companies. This is the last time!!!
I will make every effort to get the insurance paperwork worded correctly to you. Then I plan to make every effort to refinance with another company. I served my Country and The US Navy you are supposed to serve your members not treat them so poorly.

Stu said...

We have a house in Maryland financed with NFCU. I got very short notice orders to San Diego, and we had to rent the house out. When the renters stopped paying rent, we continued to pay the mortgage, but after a while, it got too hard. We were paying attorney fees to get them out in addition to the mortgage and our own bills. We went to NFCU (both of us, in person) to explain our situation, before that month's payment was even late, and they just handed us a phone number to call. We called the number, filled out the paperwork they asked us to fill out, sent it in, and then NFCU froze our accounts that SAME MONTH, our mortgage payment was not even 30 days past due! I was stuck 60 miles from our house when this happened, without enough gas to get home!! Seven months later, we finally got a loan modification. I can't even begin to describe to you all how stressful they made the process. I also want to say how wonderful USAA has been. I want to encourage everyone who has an account with NFCU to switch to USAA. Our house was trashed and we were just recently able to get it ready to rent again with the help of some amazing friends, our Church and family. We are still barely making ends meet even with the reduced mortgage payment. It's lower, but with no rent coming in, it's hard, so we are one month late on our credit card payment. They call us several times a day, claiming that they have not been able to reach us by phone, even though I have spoken with three people. They called our son, we have told him to close his account with them. We will make the payment as soon as we can, but we have mouths to feed, and a credit card with a bank that has treated us like criminals is last on our list of bills to pay. They also threatened to call my CO, and have been very derogatory in their comments.

Anonymous said...

I have been a long time Navy Federal Credit Union Member and Shareholder. This company needs better customer service. They are very sexist, and they have no respect for any member and no respect for any military person who serves active or retired.They have screwed up on my accounts, they have taken money out of my account because another member or family had over drawn their account, so since I refered them and they have they same last name they withdrawn funds illeagly out of my account. They said sorry for any inconvience that this may cause. They said they can basicly do what ever hey want. This company has messed up on car loans, ect. Anything you can think of it has been messed up. They will block you from your accounts and not want to get a supervisor or manager on the line. If you complain or if you have a major problem you need to go to the branch and contact the NCUA and the FTC, and the BBB. I have quit doing 99% of my business with these crooks.Anyone who wants to do a class action lawsuit against these crooks, please email me at nfcuscam@gmail.com and email me your name, phone number and your issue with NFCU and we will put a stop to this abuse and harrassment from the customer service people at NFCU.

Anonymous said...

NFCU still wants me to pay for the credit cards regardless of my employment. I called them saying I am unemployed and is there anyway to stop the payments for a few months or until I can get a job. They said, "Sorry." These are some money hungry bastards.

Anonymous said...

This is BS! Soldiers protecti g these people in US - and get this treatment!!! Im dedicated DoD support our warfighters 120% and NFCU NEEDS TO BE SHUTDOWN! ITS BAD BUSINESS !!!

Anonymous said...

Are you still.filing class action lawsuit ? Need to file asap

Anonymous said...

I'm about to file bankruptcy and I owe NFCU a ton of money I'm still active duty and am curious if I file what will happen? Can they call my command? I will have an attorney represent me but one call to the command and it could really screw things up....what are my odds of a smooth chapter 7 when I owe navy fed about $65k not including my car? I'm in cali right now but own my own home in florida. I'm torn in what I should do....can they garnish wages?